Business & Place Blog

There has been much talk about a return to the 1980′s: Enterprise Zone’s “we’ve been here before”; all they did was shift investment from one place to another and all the investment left as soon as the Enterprise Zone finished – etc, etc.

All of that might be true – but surely we can learn lessons from what went before? And some proper thought around how the Enterprise Zone might fit within a wider economic development and business support and encouragement strategy is surely the key.

What seems reasonably obvious is that Enterprise Zone’s that serve to encourage and further strengthen and develop existing industrial and economic strengths are a particularly good way to encourage longevity of impact. A good example of this is the proposed EZ for the centre of Northampton. Here the emphasis is on precision and performance engineering, building on an existing cluster of expertise within the town and indeed across Northamptonshire. Of course this EZ, if approved, wont be absolutely tied to this label and no doubt will capitalise on other opportunities as they emerge. But by showing a clear target for encouraging new companies in to Northampton that doesn’t rely soley on the advatages of an Enterprise Zone, but will be helped by it, means that it is very likely that those companies will not simply move on when the Enterprise Zone goes away. But, and this is the big but, the EZ provides a tool to convince individuals and companies to take the step, start a business or start a new part of their business in Northampton which they wouldn’t otherwise have done. That has to be good for the UK and for the local economy.

Innovation networks, Innovation Centre networks and Universities have a key role to play here also – they are the nurturers of many of the value add, higher skill, knowledge economy individuals and potential companies that will offer real opportunities to demonstrate the success of an Enterprise Zone. Grown on space, from initial innovation centre space, remains a key issue in many locations. Enterprise Zone’s can help to solve this.

And an element of local policing may also be important, although it will be difficult to restrict one company in favour of another. But to make the very most of an awarded Enterprise Zone a way to support winners who are going to buy in to the local economy for the medium to long term will need to be found.

Today’s UK Government Budget announcements appear to offer potential opportunities for co-ordinated local economy, key sector support. 

Much of the detail has still to come out of course but three things that catch the eye:   

Enterprise Zones: an urban focus first of all in designated city region locations; and then the opportunity for other locations, (or maybe groups of businesses in a particular location?) to bid on a further 10 EZ’s. A big emphasis on working with LEPs on this. Are LEPs organised enough to pursue this? Some are. Some it is clear, are not. And then of course there are those locations that don’t have a LEP…

University Technical Colleges: 24 more to be established by 2014. We have close experience of the Tresham College/ National Motorsport Academy UTC at Silverstone in Northamptonshire – which works very well in support of the performance engineering, motorsport cluster in that county. Where there aren’t UTC’s there is a real opportunity for local economic delivery bodies to work with business, HE and FE to tackle a key part of any location’s business proposition.  

Apprenticeships: On a similar theme to the UTC’s and about economic inclusion for the young and unemployed, but also about addressing barriers faced by SMEs in accessing apprenticeships.

The Government is also to encourage and support business consortia to set up and maintain advanced and higher apprenticeships schemes, supported by grants, creating a further 10,000 apprenticeships within the overall apprenticeship programme. Perhaps that might be the same business consortia that collaborated on the establishment of the University Training College and supported the proposal for an Enterprise Zone?

Its been a turbulent period (putting it mildly) on a wide range of business support activities in the last 12 months in the UK – and its not over yet. But do the above three proposals and others that are now starting to take real shape offer genuine opportunities for many different locations to make a strong business and place co-ordinated pitch for government support for battered local economies? They just might.

The inner workings and complexities of the national and local government sector has perplexed the UK private sector for many a long year.

Now, at this time of great change in approach and significant withdrawl of government funding for front line delivery, in many quarters the level of confusion will perhaps only intensify.

While big business and companies with the staff to spare go along to LEP meetings and pursue places on emerging LEP boards, smaller companies are left to express continued frustration when, diverted by the very obvious need to run their business, they seem to miss out, not be part of the discussion – and remain unclear and unable to access the support that remains available.

Small, growing companies, many comentators agree, will be the foundation of recovery in both local and national economies. No wonder then that organisations such as the Federation of Small Business express concern when in the changing local environment in particular the voice of small business often seems to struggle to be heard.

Despite the fact that the Business Link service has received, it is perhaps fair to say, mixed views on its effectiveness; the decision to remove all front line, face to face services by November this year and replace it all with a website seems a little draconian, even in this great age of cost cutting. And although services such as the very effective Manufacturing Advisory Service seem likely to remain the loss of the face to face Business Link advisors removes one of the slightly more clearer routes for small business to follow in support of government support.

But as is often the case, as one door closes another one opens and already in a number of locations, new ideas and new and inovative ways of supporting the vital to growth small business sector are begining to emerge – and these focused in many cases on the more immediate needs of the local economy and small (and large!) business concerns in a more concentrated local environment – local availability of skills, infrastructure and availability of appropriate property for growth, for example.

So maybe Localism does work! – or at least it does where public and private sector can come quickly together, agree a programme for action, with whatever resource is available, and make it happen. Making it happen and ensuring that all sections of the business community have an input and know how to access support for growth is the challenge now.

Manufacturing is vital for the UK economy!

Of course there are many who have continued to say this for years; probably never stopped saying it – even during that period when many were convinced that the UK would be a leading edge service led economy – and manufacturing: well that’s all gone East hasn’t it?.    

But now, following the mother of all economic downturns and a recognition that too much service industry and not enough manufacturing creates a dangerous imbalance; a mood that has been growing gradually has suddenly found full flourish with a clear commitment by government to supporting the development of new technologies and new forms of manufacture to position the UK as a leading edge balanced economy for the 21st century.  Key sector focused Growth Hubs, Technology and Innovation Centres and a high profile Manufacturing Technology Centre are all on the agenda.

In a report released in the last week the Engineering Employers Federation is calling for a significant rise in the number of new manufacturing companies and in a joint report with the Royal Bank of Scotland is urging the government to support growth within existing and new manufacturing companies to create the job growth that the UK economy will need in the next few years.

Local areas need to quickly assess where and how they can be part of this emerging new movement for action and how they and the businesses of today and the businesses of tomorrow that will drive forward their local economy can benefit. And of course, if you are in to manufacturing and have new technology innovations to bring to the fore, there might be opportunities in it for you too!

And so the first round of LEPs have been given their go ahead and, as I write, are in the process of considering governance, structure and of course the all important sources of finance to enable the LEP to deliver - and where, indeed, that finance is going to come from.

The government has been very clear that there will be no money allocated from the centre to support LEP delivery stuctures or whatever delivery function emerges (or is perhaps retained) from the developing discussions. For on the ground local delivery, the money has to be found from local sources – local government, local academic institutions perhaps (although they also of course have some funding challenges) and from the local business community.

And this is perhaps something that the business community hasn’t quite yet fully grasped: LEPs mean, at least at the beginning, less money – certainly a lot less government money compared to what the previous government pumped in to organisations such as the Regional Development Agencies – and so that means that if any one place, with or without a LEP believes that it is important to maintain its economic development activity, attract new investment and support its existing businesses and entrepreneurs; the business community and its representative organisations need, as they have been asked to do, to make a strong contribution to the repositioning and development of activity. And that that might mean doing more than being part of a LEP governance structure and attending LEP business engagament events.